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Trading News

Crypto Market Bounced Back Marginally By $5 Billion As Bitcoin Price Surpasses $3,700

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Since last 2 days, the crypto exchange has bounced back marginally by $5 billion, from $120 billion to $125 billion after a promising breakout of the Bitcoin cost above $3,700.

The unexpected solid development of Bitcoin could prompt the transient recovery of other major crypto resources and low market capital cryptocurrencies by the next few days.

Bitcoin’s Promising Gains by Monday

Generally, amid the weekend, the crypto exchange plans to show a plunge in volume and a minor decrease in exchanging activities.

Despite, since last two days, the volume of Bitcoin has stayed over the $5 billion mark with the day by day volume of the crypto exchange above $17 billion.

The moderately high everyday volume of major crypto resources has enabled the market to bounce back before Monday when the volume typically starts to pick up, and the market begins to see an expansion in exchange activities.

Preceding the breakout of Bitcoin above $3,700, an ultimate digital currency technical expert with an online alias ‘Cred’ said that if the Bitcoin cost outperforms $3,700 temporarily, it is almost certain to prompt a positive upward development.

The expert clarified:

Extremely compacted value activity following the high set on Monday. My agenda is direct: Price underneath and discovering resistance at $3,560s I’ll search for moves focusing on $3,430s. Breakout and cost acknowledged above $3,700s I’ll be a buyer until $3,840s.

All in all, while a breakout of obstruction levels beneath the $4,000 stamp may keep a further dip under the mid-$3,000 region, it might be lacking in giving an establishment to the predominant cryptocurrency to start a legitimate short-term rally.

Since the end of December 2018, Bitcoin value has stayed in a tight range between $3,500 to $4,100, unfit to neither test key opposition levels nor dip under vital help levels.

Not absolutely unfavorable for Bitcoin

In all cases, many major crypto resources and low market capital digital resources have reported 2 to 4% gains against the U.S. dollar on the day.

Ethereum, Litecoin, and Cardano flooded by 3, 4 and 5% separately over the last 12 hours, following the upward value movement of Bitcoin.

While the bear showcase in crypto stays in full impact, driving organizations in likes of Binance see an appeal in key markets like Europe.

Recently, following the release of Binance Jersey, a directed fiat-to-crypto trade that supports British pound and euro exchanges, Binance CEO Changpeng Zhao stated:

Binance.je is overwhelmed with enrollments. There is an overabundance of KYC checks as of now. More assets are distributed to lessen it. Meanwhile, we value your comprehension and tolerance. The enrollment prize is FIFO based no stresses. Simply crazy! One thing we can do is thinking little of ourselves and the market.

To keep a further dip under a low enough range, a supportable high daily volume in the crypto showcase is pivotal. For the time being, the market is seeing a moderately abnormal state of exchanging movement crosswise over major markets.

China Foreign Direct Investment into US Dropped Says Report
Opinion & Analysis

China’s Foreign Direct Investment into US Dropped, Says Report

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Foreign Direct Investment from China into the United States shrunk for the second year in a row.

According to the new data by the Rhodium Group, in 2018 Chinese FDI in the United States fell to just $4.8 billion — a massive decline from $29 billion in 2017 and $46 billion in 2016.

The figure of 2018 released by the independent group is a 90 percent decline from 2016 and the lowest level in FDI by China into the United States since 2011.

The report of the decline comes in between the on-going trade war between the two countries. China has been allegedly asking its companies to reduce their global holding and stocks so that it can reduce its debt level.

According to the same data, almost $13 billion worth of assets were sold in 2018 by China in the United States. China bought much of these assets in the 2015⎯2016 investment booms. Chinese net direct investment into the United States saw a decline of $8 billion in 2018, including those divestitures.

The group also added that there is also a $20 billion worth of divestitures that is still pending.

In recent months since the tariff war started between the two economies, Chinese companies have started selling assets. Anbang has already put up a number of its U.S. luxury hotels for sale, HNA Group has also allotted billions of dollars’ worth of assets for sale, Fosun International is willing to sell a stake in its New York property, 28 Liberty, and Dalian Wanda Group is looking for buyers for a sale of its stake in Legendary Entertainment.

Though Foreign Direct Investment from China into the United States fell, venture capital funding from Chinese resources into the United States has gained a record high of $3.1 billion, the Rhodium group said.

The National Association of Realtors data shows that amidst the contracting Foreign Direct Investment, Chinese investors are still on the top in buying residential housing in the United States both in terms of units and value. This shows the growing interest among the Chinese middle class in the American market.

Opinion & Analysis

Slowdown in German Economy: Growth Weakest in 5 Years

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The official economic data released in Germany has said that there was weak growth in 2018 and has just managed to avoid a recession. Germany’s economy is the largest in Europe, and this slowdown has brought an end to the boom they saw in the past decade. As per the data released by the federal statistics, there was a reduction in growth from 2.2 % which was reported in the last two years to 1.5 % in 2018. In terms of GDP for 2018, it was €40,900 per person or €3.4 trillion. There was slight cheer at the end of the year when there were signs of recovery and dodging recession by a blink after having two-quarters of a dip in the output. The growing concern is that the slowdown is longer than what was anticipated and is not a temporary deviation anymore.

Possible Reasons for this Setback:

  • The government and a few experts say the reason for this economic state is due to a few ‘one-off’ factors which will probably be rectified in the coming year.
  • Low levels of water in the Rhine due to drought which affected raw materials shipping and chemical shipments.
  • Trouble in the auto manufacturing sector due to bottlenecks in production. The companies have to adhere to new emission standards set by the European Union which impacted production and sales.
  • Brexit impacted Germany as trade suffered.
  • US President Trump’s trade war with China and Brussels impacted exports.

A Silver Lining in the Gloomy Economy

The silver lining in all this economic gloom in Germany is that the consumer spending is good as the unemployment levels are at a historical low and the domestic fundamentals are strong.

Though economists are optimistic, lack of new structural reforms, lack of investment in infrastructures like airlines, railway, and digital technologies can hugely impact the economy and push it down further.

Many European countries like Italy are also in recession, and the going is getting tougher as the Eurozone as a whole is reeling from a decrease in demand for services and goods in 2018. That has made many forecasters alter their projections and predict a lower growth year on year. Moreover, there are many political concerns which have dented the consumer and business confidence which has resulted in less production. Also unless these concerns are addressed quickly even increased domestic spending will not be able to offset the impact of slow exports.

North Korea Aims
News

North Korea Aims to Win Investments from Belt and Road Initiative

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After being infamous for facing the ire of the United States, North Korea seems to have changed its way. Though, not on its security front, it is now aiming to bring about economic development. The recent meeting between the North Korean leader Kim Jong Un and Chinese President Xi Jinping happened in Beijing. The meeting had multiple agendas like economic ties, nuclear talks and a possible second summit between the U.S. President Trump and Kim.

But, there was one topic which was officially not on the agenda. But, it was considered and thought upon. It was the idea of North Korea joining China’s ambitious continent-spanning Belt and Road Initiative, a project aiming to link more than 60 countries in Asia, Europe, Africa, and the Middle East through overland and maritime routes.

After the nuclear threats, the isolation by major countries and the United Nations has been weakening the nation gradually. North Korea is now investment-hungry. And, as per experts, it is the major reason Kim has been engaging with global leaders over the past few years.

North Korea’s other Goals

As the country has been trying very hard to secure nuclear power for prospective alleged threats from the neighbors, North Korea should now move forward to have other goals as well. It has a bad economic condition, so an economic goal for the nation is the need of the hour.

Seoul based online newspaper agency NK News published last month that North Korea is in need of $7.7 million investment. And the information is on North Kore’s foreign trade ministry’s website. And, for this to be happening North Korea would definitely need the help from its rich neighbors.

Among all its neighbors, China seems the brightest for North Korea. The geography, political ideology and the history they share are quite comforting for North Korea. And, China has been the largest trading partner for the economically isolated country for last few years.

Dane Chamorro, a senior partner in the Asia Pacific division of Control Risks, a consulting firm specializing in politics, said North Korea would love to be a part of the mighty Belt and road initiative. It is only waiting for an invitation. Once it is in the group, it can utilize investments and funding to upgrade railway links, ports, and other infrastructures.

Beijing also is not immune to this idea. It has always been prompt in adding more number of partners to this multi-country project. It should be reported here that China has invited North Korea to be a part of the Belt and Road Initiative summit in 2017. But, as of now, nothing has been confirmed about the partnership.

Mintaro Oba, a former U.S. State Department official who specialized in the Koreas in the Obama administration, said having North Korea in the group will be more trouble than the economic worth. So, it is evident China will take much time to consider this.

Having countries like North Korea in a group only will give the group a bad name. It will further cement the doubts and skepticisms of the United States and India that Belt and Road initiative is only to increase the dependence of other member nations on China and with so much of skepticism, it is unlikely to flourish.

As of now, the Chinese leader has decided to go slow with North Korea. Both of these countries will have to wait and watch the global changes in the geopolitical arena. Then only China can decide whether the two countries’ relationship can go more than just security to an economic partnership.

If denuclearisation happens soon in North Korea, it is more likely that China will help the country to be able to stand on its own. China would definitely like North Korea to learn from its history. The economic type and model of economic form in China can be implemented in North Korea; if that happens, China would be the first in Asia to help the country in economic development.

And another factor in this would be South Korea. South Korea is a significant partner in BRI, and if North Korea is taken aboard, South Korea will also have to decide how much the government wants to connect the New Northern Policy with the BRI.

Goldman Sachs Predicts
Company News

Goldman Sachs Predicts Low Earning by Firms in 2019

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Goldman Sachs has predicted to see low growth in earnings for the United States in 2019. So, terming it as a disappointment, it advised its clients to stay away from the companies most dependent and leveraged to economic growth.

In a research report, it had warned its bullish investors that the corporate profits of several big consumer brands might dip this year and investors have been advised to keep their expectation on that line.

David Kostin, the chief equity strategist for the firm, noted in the report that Weak guidance from several big companies such as Apple and Macy’s had increased the focus on S&P 500 earnings growth. He also added that the earnings had been the vital point on U.S. equities for the year 2018, but there is no doubt over continuing the same for 2019.

Fourth quarter results about earning are about to come, and it had expected to have a growth of about 22 percent all over from the previous year. The much-hyped tax cut might be one reason for this whooping growth. But, this is never happening in 2019. For the first quarter of 2019, companies are worried about the sales trend and profit earning trend. The whole world is experiencing slow growth, and it is not different in the United States as well. Due to low demand, the companies’ profit earning may get decreased.

As of now, Goldman’s expectation from the market to grow for the whole of 2019 is at 6 percent. Here the market specifies to S&P 500 companies. But, as per some economists in Goldman as well, this figure seems very ambitious.

The note states the recent developments in the macroeconomic landscape have the potential to drive up to $5 of potential downside to our 2019 EPS (earnings per share) estimate (to $168). The note also says that the prediction by its economists is an average annual real GDP growth of 2.4 percent for the US (-20 bp vs. baseline) and 3.5 percent for the whole world (-30 bp vs. baseline).

The crux of the whole story is the earnings growth per share this year can come down to as low as 3 percent this year after considering additional factors such as a stronger dollar and falling oil prices.

It also has advised its clients to decide for themselves whether they will keep on bidding on certain stocks after the low performance in the fourth quarter of 2018. The S&P 500 is up just by 3.6 percent so far in 2018 after a gain of two weeks only. Macy’s has posted its worst trading day in the last quarter, yet its stocks are high. And the tech giant Apple has already made it clear that it would make fewer iPhones for 2019 owing to a trade war and low demand in China.

Moreover, Goldman – one of the Top Wealth Management Firms is advising its client to be cautious as overall economic and earnings growth expectations are getting dipped. It is recommending its clients to stay away from the stocks which have betas to economic growth, like the materials and industrial sectors.